BILL ANALYSIS                                                                                                                                                                                                    



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 907|
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                                 THIRD READING


          Bill No:  SB 907
          Author:   Evans (D)
          Amended:  5/3/11
          Vote:     21

           
           SENATE GOVERNANCE & FINANCE COMMITTEE  :  6-2, 4/27/11
          AYES:  Wolk, Huff, DeSaulnier, Hancock, Hernandez, Liu
          NOES:  Fuller, La Malfa
          NO VOTE RECORDED:  Kehoe

           SENATE APPROPRIATIONS COMMITTEE  :  6-3, 5/26/11
          AYES:  Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
          NOES:  Walters, Emmerson, Runner


           SUBJECT  :    Master Plan for Infrastructure Financing and 
          Development
                        Commission

           SOURCE  :     Author


           DIGEST  :    This bill creates the 11-member Master Plan for 
          Infrastructure Financing and Development Commission.  By 
          December 1, 2013, the Commission must submit a final report 
          to the Governor and the Legislature which contains a 
          long-term plan and strategy for the state's infrastructure 
          needs and a prioritized plan to meet those needs.  The 
          Commission must also submit periodic progress reports.

           ANALYSIS  :    Existing law requires the governor to annually 
          submit a five-year infrastructure plan to the Legislature.  
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          The plan must contain Identification of infrastructure 
          requested by agencies; aggregate funding for 
          transportation; infrastructure needs for K-12 education; 
          instructional facility needs for UC, CSU, and the Community 
          Colleges; and the cost of providing the infrastructure, 
          sources of funding, and impact on the state's debt position

          This bill creates the 11-member Master Plan for 
          Infrastructure Financing and Development Commission.  By 
          December 1, 2013, the Commission must submit a final report 
          to the Governor and the Legislature which contains a 
          long-term plan and strategy for the state's infrastructure 
          needs and a prioritized plan to meet those needs.  The 
          Commission must also submit periodic progress reports.

          The Commission dissolves 30 days after it issues its final 
          report.  Further, this bill's provisions automatically 
          terminate when the Commission dissolves, unless legislators 
          extend the date.

          The Commission's plan must:

                 Project population, social, and economic trends 
               through 2050.
                 Identify the type and distribution of 
               infrastructure needed through 2050.
                 Incorporate the findings of existing state 
               infrastructure plans and reports.
                 Assess the state's capital needs for infrastructure 
               projects through 2050, including private capital and 
               public financing.
                 Assess the availability of private and public funds 
               for joint projects through 2050.
                 Recommend a financing plan for capital needs 
               through 2050, by five-year intervals, along with 
               feasible financing methods.

          The Commission must recommend a method to track the state's 
          infrastructure progress and periodically reassess the 
          master plan.

          The Commission's final report must contain a plan that 
          identifies the types, distribution, and priority for 
          developing infrastructure projects through 2050, and a 

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          measureable process to implement this plan.  The plan must 
          also include a process to periodically adjust these 
          projects to meet changing circumstances.

          When developing its recommendations, the Commission must 
          use existing state and local reports on infrastructure 
          needs.  This bill specifically lists:

                 The Governor's annual, five-year infrastructure 
               plan.
                 The State Environmental Goals and Policy Report.
                 The California Transportation Plan.
                 The sustainable communities strategies.
                 Greenhouse gas emissions reduction planning.
                 The California Water Plan.

          The Commission consists of:

          1.The State Treasurer or a designee with a public finance 
            background.

          2.Six members appointed by the Governor:

                 A representative from organized labor.
                 A representative from a statewide business 
               organization.
                 A public member.
                 A state agency or department director.
                 A member with large-scale public works financing 
               expertise.
                 An economist accomplished in interpreting the 
               state's economy.

          1.Two members appointed by the Assembly Speaker:

                 A member with transportation expertise.
                 A member with natural resources and conservation 
               expertise.

          1.Two members appointed by the Senate Rules Committee:

                 A member with education infrastructure financing 
               expertise.
                 A member with housing, urban planning, or financing 

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               expertise.

          The Governor appoints the Commission's chair who serves 
          full-time at a salary of up to $150,000 annually.  The 
          Commission's vice chair is the State Treasurer (or 
          designee).  The other Commissioner members may receive a 
          per diem of $50, not to exceed $300 a month, plus travel 
          and other expenses.

          The Commission's chair appoints the executive director who 
          receives a salary of up to $150,000 annually.  The 
          executive officer must examine ways to borrow staff from 
          state and local governments and private nonprofit 
          organizations, subject to the Commission's approval and 
          direction.  The Commission can ask experts for help.  The 
          Commission may delegate contracting authority to its staff, 
          subject to relevant state law.

          This bill requires the Commission's products to incorporate 
          opportunity for public comment and participation.  The 
          Commission's chair must appoint at least five task force 
          committees to assess, inventory, and report on long-term 
          needs and financing alternatives:

                 Planning and financing.
                 Transportation.
                 Housing.
                 Natural resources and conservation.
                 Education.

          A Commission member may chair each task force committee 
          which must also include topical experts and representatives 
          of industry and trade groups.  The chair of each task force 
          committee must develop a work plan with deadlines, and 
          convene meetings.  Each task force committee's chair must 
          present its findings to the Commission.

          This bill becomes operative only if the Legislature 
          appropriates funds through the Budget Act to support the 
          Commission.  This bill declares that the Legislature will 
          appropriate funds for the Commission's operating costs.  
          This bill indicates that funds will be appropriated from 
          the existing California Debt and Investment Advisory 
          Commission fund.

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          This bill contains five legislative findings and 
          declarations regarding California's population growth and 
          the need to plan for infrastructure.

           Background
           
          State law intends the Governor's Environmental Goals and 
          Policy Report to be a "clear framework" for statewide 
          functional plans and capital spending.  A 1992 OPR study, 
           Statewide Plan Coordination in California  , identified over 
          two dozen state functional plans that affect growth 
          management, including plans for coastal resources 
          (California Coastal Commission), energy supplies 
          (California Energy Commission), housing (Department of 
          Housing and Community Development), transportation 
          (Department of Transportation), and water resources 
          (Department of Water Resources), among others.

          As part of the annual state budget proposal, the Governor 
          must submit a five-year infrastructure plan to the 
          Legislature.  This annual, five-year plan must identify:

                 Infrastructure projects requested by state 
               agencies.
                 Transportation projects identified in the State 
               Transportation Improvement Program.
                 K-12 school infrastructure needs.
                 Higher education facility needs.  

          The plan must estimate the costs of those infrastructure 
          projects.  The plan must also identify the criteria and 
          priorities for funding infrastructure, funding sources, the 
          effect on the state government's debt position, and 
          recommend specific projects for funding and capital outlay 
          appropriations (AB 1473, Hertzberg, 1999).  The criteria 
          for selecting state agencies' infrastructure projects must 
          be consistent with the state planning priorities adopted in 
          2002.  The State Department of Finance issued the 
           California Five-Year Infrastructure Plan  in 2002, 2003, 
          2006, 2007, and 2008.  The Department intends to issue a 
          new five-year plan in January 2012.

          Governor Schwarzenegger issued the  California Strategic 

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          Growth Plan  in 2007 and 2008, laying out the state's 
          infrastructure requirements for the next two decades.  The 
          2008 edition proposed $48.1 billion in general obligation 
          bonds and $2.3 billion in lease-revenue bonds to cover 
          projects through 2016.

          The U.S. Census counted 37.3 million Californians in April 
          2010.  According to a projection prepared by the State 
          Department of Finance in 2007, the state may reach almost 
          60 million residents by 2050.  Not only will California's 
          population grow, it will also see demographic changes 
          involving aging, immigration, race, and ethnicity.  
          Settlement patterns may also change as established 
          communities become denser.  By any measure, Californians 
          will need more housing and the public works that serve 
          them.  

           Prior Legislation
           
          AB 2579 (Evans, 2010) which died in the Assembly 
          Appropriations Committee.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  No

          According to the Senate Appropriations Committee:

                          Fiscal Impact (in thousands)

           Major Provisions                2011-12     2012-13    
           2013-14   Fund  
          New Commission                     $650      $350 Special*

          * California Debt and Investment Advisory Commission Fund 
            (specified in the bill).

           SUPPORT  :   (Per Senate Governance & Finance Committee 
          analysis - unable to reverify at time of writing)

          State Treasurer Bill Lockyer
          American Council of Engineering Companies
          American Society of Civil Engineers-Region 9
          Associated General Contractors of California Chapters
          California Alliance for Jobs

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          California Tax Reform Association
          California's Coalition for Adequate School Housing
          Engineering and Utility Contractors Association
          Self-Help Counties Coalition
          Transportation California


          AGB:nl  5/27/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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